EU economic recovery package fails to tackle the immediate problem

The EU’s economic recovery package is the wrong answer for Britain, which already has exceptionally poor public finances, Sir Robert Atkins MEP, said today.

The European Commission has announced a £160bn economic recovery package, equivalent to 1.5 per cent of GDP across the EU. EU countries will be encouraged to spend the equivalent of 1.2 percent of GDP on fiscal stimulus measures, whilst the remaining 0.3 per cent will be found from EU coffers.

Sir Robert warned that the commission seems more interested in being seen to act to coordinate the already disparate approaches to spending being adopted by Europe’s key members, when it should be seeking common ground to provide much-needed confidence that would get banks lending again.

Sir Robert said:

“The European Commission seems more eager to be seen to do something, rather than actually helping solve the immediate concerns of families and small businesses.

“The challenge now is to get banks lending to each other and to businesses and citizens. The commission could have directed its efforts towards encouraging government guarantees for deposits or new lending that would help struggling households and businesses now.

“Fiscal stimulus plans are an option in countries with healthy public finances, but the UK Government’s proposals will do little to stimulate consumption and are still so expensive that they will just make recovering from the recession particularly difficult in Britain.

“Labour’s failure to fix the roof when the sun was shining meant Britain was on the verge of breaching the Stability and Growth Pact even before the credit crunch. Labour’s Bombshell budget will mean we are in breach for many years to come.

“I am sorry to hear the European Commission suggesting that Britain’s example should be followed by others.”